ETF Brokers: Fidelity Investments and Charles Schwab - dummies

ETF Brokers: Fidelity Investments and Charles Schwab

By Russell Wild

Two brokerage houses that house exchange-traded funds (ETFs), along with other stock options, competitively are Fidelity Investments and Charles Schwab. Both have their own ETFs and allow you to house ETFs from other companies as well.

Fidelity Investments

The service at Fidelity is fabulous. The cost of trading at Fidelity is very competitive. Like Vanguard, Fidelity also has some excellent low-cost index funds of its own, which you may wish to keep alongside your ETF portfolio. And the Fidelity website has some really good tools — some of the best available — for analyzing your portfolio and researching new investments.

At present, 30 of BlackRock’s iShares ETFs can be traded at Fidelity with no fees. All other ETFs will cost you $7.95 to trade. Fidelity, however, is quite liberal in granting free trades to new customers. Although the policy changes from time to time, a recent number for those who opened up fresh accounts at Fidelity was 200 free trades . . . enough to last a very good while.

Charles Schwab

“Invest with Chuck” Schwab offers a lineup of 13 low-cost, sensible ETFs of its own creation, and they trade free if you open an account with this brokerage. All other ETFs cost $10 per online trade.

“Chuck’s” staff is friendly and knowledgeable. Unfortunately, Chuck invested — and lost — much of its clients’ money in the mortgage crisis of 2008, and then admitted no wrong and made no restitution until being strong-armed by the court. (For those familiar with the case, this is Schwab’s YieldPlus Fund debacle.)